Edison Reaches Settlement on San Onofre Shutdown CostMark Chediak
Edison International reached a settlement with consumer groups over costs associated with its decision to shut the largest nuclear power plant in Southern California.
Under the agreement, Edison won’t be able to ask its customers to pay for $730 million in expenses related to its replacement of aging steam generators at its San Onofre nuclear plant, the Rosemead, California-based utility owner said in a filing with the U.S. Securities and Exchange Commission today. The amount includes $542 million for expenses it had hoped to bill to customers, and the remainder for costs it already had collected.
The company will be able to charge customers for costs of buying power after the reactors were shut in 2012.
The agreement with the state Office of Ratepayer Advocates, the Utility Reform Network, a consumer advocacy group also known as TURN, and Sempra Energy’s San Diego Electric & Gas, part owner of the plant, needs approval from the five-member California Public Utilities Commission.
If approved, the pact would resolve an investigation by the commission into who would pay for the early closing of Edison’s damaged nuclear generators. Edison in June announced it would permanently shut both reactors at the San Onofre plant after unusual wear was found on steam generator tubes. The plant stopped producing power after leaks were found in the tubes.
$100 Million Charge
Edison, owner of the Southern California Edison utility, will take a charge of $100 million, or 31 cents a share, in the first quarter associated with the settlement. That’s in addition to the $365 million charge it recorded in the second quarter of last year. The company said the settlement would help “core earnings” by 3 cents a share this year.
Edison is pursuing claims against Mitsubishi Heavy Industries Inc., which designed and supplied the replacement steam generators. It’s also seeking to collect about $320 million from an insurance policy on the plant.